Single market in Energy

We are talking about the importance of creating a genuine Single Market in energy in the EU.

At the same time, some member states (like the UK) are pressing ahead with shale gas exploration, while others (like France) have firmly decided against it.

Is it consistent to have a Single Market where all member-states have similar access to an energy resource like gas, but only a few of them actually exploit it? Does this not give an unfair advantage to those who expect to buy the gas but decline to produce it?

7 Responses to Written Question to the European Commission

Dear Roger
This Question is beyond my education, as someone will need to explain it to me. Simply if the unit price of French nuclear energy purchased by the UK through the inter connector is cosiderably more than that of shale energy sold by us ,then the EU has an unfair advantage.
Another economic problem will arise if the world price of gas falls due to over supply made worse by ever higher unit cost of nuclear and renewables then this will become grossly unfair to the UK.
Regards Thomas Fox Southport UK

But the buyers without producers have to give large amounts of money to us (assuming we are among the producers) assuring us a positive export gap. Just as France has, for 4 decades, kept their otherwise not very competitive economy healthy by exporting nuclear electricity to the surrounding countries, including us, foolish enough not to make it themselves.

The EU wants a single market in Energy so the pool price would be much higher than USA due to the more expensive nuclear and renewables with less use of cheaper hydrocarbon generation.
Since Northern Europe can not do without imported gas for heat that’s tied to world commodity prices then our home produced shale gas would subsidise the grand designs of the EU
So Neilfutureboy as I am no economist ,could you explain to me how these positive export gaps or distortion of trade by intervention within a one EU State will work?

The retail price of electricity will be set by the average of the various methods of generation. Renewables certainly drive up retail prices enormously. Nuclear is more complicated – almost all of its cost is not the cost of producing the power but of government regulation – hence Hinkley Point being 4 times the cost of an equivalent European built plant in China.

The price of gas is established by the intersection of supply and demand curves (like all prices in a free market. It may well be that banning fracking elsewhere will artificially reduce supply and increase local demand thereby giving us a better export price. Being able to sell essentially unlimited amounts at a high price is not generally considered a bad thing.

However the assertion that our competitor’s gas price would remain high is questionable. If the Gulf Arabs are considering buying US gas, as recently announced, because it is so cheap it is quite possible that EU countries will too. Indeed the recent survival of Grangemouth refinery is also because they will be importing US shale gas (the SNP preventing drilling for the plentiful local stuff – modern equivalent of carrying coal to Newcastle.

No, its not consistent – meaning it would not be carried out fairly over time. I would have my own country’s dependencies at the fore and would have fixed the roofs while the sun was shining 50 yrs ago. Easy said now I guess. I saw enough of the oil embargo on Europe to know that nobody could/can be trusted.

Trying to get general agreement on something as important as energy with an out of country organization that is impossible to recognize is rather foolish. With our old friends is perhaps a better way to go, and they would be in the North. We are part way there anyway.

Just imagine bending over to the green/libs again (and again) once the deal has been struck. Thats what I mean by over time. I think you would need to be quite young to swallow this idea – and walk in to more problems over the following 25yr period.